+eugenebut: This is because the WKWebView is destroyed/recreated when navigating back to the NTP/forward to the page. However, I am setting the clipsToBounds property only when the tab is created. So when the WKWebView is destroyed, the property is lost.
I don't see many ways to fix it expect setting the property for every page load. Am I missing something?

I think CRWWebViewScrollViewProxy should persists clipsToBounds property. ios/chrome layer should not care about web view destructions. Can we update -[CRWWebViewScrollViewProxy setScrollView:] to update clipsToBounds every time when web view is recreated?

Sure, we currently reset the property after setting it for the first time. I introduced this behavior because it is what we are doing for all the other properties of CRWWebViewScrollViewProxy.

Should the other properties behavior in the same way (i.e. not reset after being set)?

For consistency reason it would be better if other properties do not reset after being set.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/5fe307159eea27de82c37e8898d875bd4e4ceab6

commit 5fe307159eea27de82c37e8898d875bd4e4ceab6
Author: Gauthier Ambard <gambard@chromium.org>
Date: Tue Apr 17 07:28:43 2018

Persit the property values of the WebViewScroll

This CL changes the CRWWebViewScrollViewProxy such as it is now
persisting the value of the properties even after setting a new
ScrollView.

Bug:  831519 
Cq-Include-Trybots: master.tryserver.chromium.mac:ios-simulator-cronet;master.tryserver.chromium.mac:ios-simulator-full-configs
Change-Id: I776c7983df536d5bed9c03a826998413b8a6d246
Reviewed-on: https://chromium-review.googlesource.com/1013520
Reviewed-by: Eugene But <eugenebut@chromium.org>
Commit-Queue: Gauthier Ambard <gambard@chromium.org>
Cr-Commit-Position: refs/heads/master@{#551271}
[modify] https://crrev.com/5fe307159eea27de82c37e8898d875bd4e4ceab6/ios/web/web_state/ui/crw_web_view_scroll_view_proxy.mm
[modify] https://crrev.com/5fe307159eea27de82c37e8898d875bd4e4ceab6/ios/web/web_state/ui/crw_web_view_scroll_view_proxy_unittest.mm

Verified in 68.0.3405.0 Canary in iPhone 8plus(iOS 11.2.6) and iPhone 7plus(iOS 10.3.3)

Followed the steps in comment #0. The issue is now resolved blur effect is displayed in toolbar

The NextAction date has arrived: 2018-04-25